Why you should drive an electric car as your company vehicle

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The Mobility House Team

May 18, 2020

(Last updated: March 21, 2023)

Estimated reading time: 4 minutes

Drivers of electric cars as company vehicles benefit from tax savings - and more.

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Now is a good time to switch to an electric car as a company car. In 2020, the German parliament already halved the tax on the private use of electric vehicles. The non-cash benefit of the private use of a purely electric company car now only has to be taxed at 0.25 percent instead of the previously applicable 0.5 percent, while the rate on gasoline and diesel cars will remain at 1 percent of the gross list price per month. However, the prerequisite is that the gross list price of the electric vehicle is less than 60,000 euros.

This innovation, which applies to pure electric cars as well as hydrogen cars, means that in most cases there is a tax advantage over comparable vehicles with internal combustion engines. The 0.5 percent rule continues to apply to plug-in hybrids. However, this only applies if the vehicles have a purely electric mileage of at least 60 km or emit less than 50g CO2/km, measured according to the new WLTP standard. From 2025, plug-in hybrids must even have a range of 80 km.

In the case of plug-in hybrids, it is often mainly the driver who benefits by being able to claim the favourable company car tax for himself. However, if the driver is mainly using the internal combustion engine and does not charge or does not charge sufficiently, the fuel costs for the company explode.

For you as a driver, the annual tax advantage amounts to a not insignificant three-to-four-digit amount. In the case of a Renault Zoe, the annual tax burden due to the monetary advantage is around 700 euros lower than for its combustion engine counterpart, the Renault Clio. When comparing a Tesla Model 3 with a BMW 5 Series, the tax advantage for the Tesla driver amounts to about 1600 Euros.

In fact, an electric car would have to be four times as expensive as a comparable combustion engine to accrue the same tax burden. Against this, the purchase price difference for fully electric cars is still a four-digit amount in many model segments, and the plug-in hybrids from some manufacturers can even cost the same as a comparable diesel model. Since company cars account for about two thirds of all new registered vehicles, the new measure has the potential to make electric cars a much more attractive prospect – and to create a substantial used car market within a few years.

The legislator speaks of "acquisition", not "new registration", which is why the reduced tax rate also applies to used electric vehicles. However, if the company has already purchased the vehicle in 2018, the employee only benefits from the tax advantage if the employer has used the vehicle as a company car for the first time in 2019.

The purchase price alone is no longer an obstacle

Many experts consider this legislative measure to be even more significant for the success of electromobility than the environmental bonus, which has been increased again since July 2020 as part of the Corona stimulus package. The environmental bonus is the name given to the purchase price premium financed half by the state and half by the car manufacturers, which will be up to 6,750 euros for pure electric vehicles from January 2023, but has since been abolished for plug-in hybrids. You can also apply for this premium for a company car.

In addition, the federal states and local electricity suppliers often also subsidize the installation of private charging stations on residential buildings.

In a nutshell, purchase price itself is becoming increasingly irrelevant in the effort to remove the biggest obstacles to buying an electric car. If you or your fleet manager are still unsure, please consider this: Electric cars also have a clear advantage over combustion engines in terms of their ongoing cost for fuel, maintenance and repairs, and attract lower costs than their petrol and diesel equivalents across their entire service life. Oil change? No need. Brake wear? There is hardly any, as electric motors recover during deceleration and can bring the car to a standstill without the need to even step on the brake pedal. Not to mention, you will never find any such wear-susceptible parts such as gearboxes, alternators, timing belts and fan belts in an electric car. In terms of costs over their entire life cycle (total cost of ownership – TCO), some electric cars are already performing better than their combustion counterparts.

Where can I charge my electric car while I’m on the road?

The fact that charging infrastructure is not yet available everywhere is becoming less of a problem every day. In both urban and rural areas, there are now literally dozens of companies installing new charging stations, including an increasing number on motorways. A consortium involving the largest German car manufacturers, together with many other partners, is currently developing an intensive network of ultra-fast charging stations along trunk roads. At such power points, electricity is fed rapidly into electric car batteries at up to 350 kW. This means your car can be charged with enough energy for the next 300 to 400 kilometres in as little as 20 minutes – the perfect time to take a short break for a cup of coffee and to stretch your legs. What this means is that it is becoming more practical to undertake long-haul business trips in an electric car. It’s worth remembering that some models already on the market can achieve ranges of 400 to 500 kilometres without needing to recharge.

However, if you're still not convinced by electric cars, then a plug-in hybrid might be the better choice for you. Their standard 60–80 km range on electric power usually provides adequate flexibility for your daily commute or for short business trips. And for longer journeys, the combustion engine can take over.

How can I charge at my workplace?

It’s not rocket science to install charging facilities at your business premises or your employees’ homes; the job can be done by any qualified electrician. But if you are planning a larger array of charging stations, then it’s worth looking for the support of such experienced companies as The Mobility House. The cost of improving mains connections and annual service charges is a factor that should not be forgotten when installing several charging stations at a time. Charging and energy management systems such as ChargePilot® help to reduce these costs to a minimum.

With our help it won’t take you long to find the right charging solution for your requirements – whatever car manufacturer you have chosen. You will also be shown how to charge your electric vehicles with maximum reliability and cost-effectiveness. The company is also ready, willing and able to provide the comprehensive advice you need, with complete manufacturer neutrality on the electric cars that suit your needs best, depending on your driving profiles, as well as dealing with questions on billing, taxes and anything else that may be on your mind.

Score points for sustainability

Apart from their cost advantages, electric cars provide added value to your fleet in another way that should not be underestimated: When you take a responsible approach to transport, focusing more closely on the environmental friendliness of your fleet, your company scores massively in terms of its public image in the increasingly important arena of sustainability and environmental protection. Your image will benefit greatly from your decision, particularly against the background of the recent diesel scandal and the looming threat of climate change.

You would like to switch to an electric logistics fleet? We will gladly assist you.

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